Local government 2013: The future of public services is here

We asked six experts to give their verdicts on the events of 2012 and suggest ideas for progression in 2013. In our second instalment, Phil Baker assesses the impact of the crisis in public finances on local services and argues that a spirit of ‘creative commerciality’ can help councils to thrive.

This year you might be forgiven for thinking that public services were the one area in which the Mayan prophecies were right. For some time taciturn analysts and experienced commentators have taken turns to proclaim the end of the NHS, the police or local government. Depending on where you are standing and, combined with both health trusts and local authorities talking of bankruptcy, you might think they’re right. All this therefore begs the question; is 2013 the year when the wheels come off?

Certainly, in areas set to lose anything from an efficient accident and emergency unit to a rural post office, local communities face a daunting change in their access to public services. But these examples don’t tell the whole story. Away from the flash points, there’s a different story of local authorities, police authorities and health trusts setting the pace for successful innovation. To paraphrase William Gibson, the future of public services is here, it’s just not evenly distributed yet.

This is not to downplay the challenge, there’s a huge amount that can go wrong. Both the NHS and local government are shedding staff, overseeing a major transformation and coping with a decline in resources. Public sector organisations are beginning ever closer collaborations at a time when every partner around the table could be experiencing their own root and branch reorganisation. This tight timing and dwindling resource pot means the margin for error in 2013 is almost non-existent and there is an awful lot to get right first time.

The savings demanded in 2013 for some councils might be more straightforward to chart than those first laid out in the winter of 2010, but as the New Local Government Network (NLGN) discussed earlier this year, the low hanging fruit is almost all gone. The autumn statement established further pressures, not least the additional £445m reduction to local spending.

That hasn’t stopped some organisations from thinking creatively, in particular about their assets and partnerships. Next year will almost certainly see the beginnings of more major integrations along the lines of the tri-borough initiative in London. Machinery like the health and wellbeing boards and whole place community budgets will perhaps make these creative fusions more likely, but will only work if all partners recognise they cannot afford to continue with business as normal.

There needs to be a spirit of ‘creative commerciality’ for public sector leaders to thrive in these circumstances. With some councils actively anticipating a time when they can turn down central government grants thanks to revenue streams from their assets, ploughing this funding back into local growth programmes, localism in 2013 could take on the sort of muscular complexion not seen since Joe Chamberlain’s inspirational leadership of Birmingham. Core public services could be maintained by sweating local assets and developing new revenue streams.

Sweating assets to generate revenue does not mean selling them, especially now, with the market for many physical assets depressed. Instead, 2013 could represent the point when every public sector executive team embraces a form of creative commerciality to safeguard their financial stability.

Working with communities, under-used buildings and public spaces can be brought into public and commercial use. Intangible assets, like advertising space on public sector buildings and publications could be exploited by every public organisation instead of just a handful of trendsetters. Likewise, new thinking in areas like green energy generation mean public buildings and public spaces hold untapped resources. The only caveat is that the sector must be watchful this does not further entrench geographic inequalities – not everyone can be a Birmingham, but with the right support any area can apply Birmingham’s lessons.

As money recedes and more functions are cut, public services risk missing opportunities if fatalism takes hold. As public leaders look ahead to 2013 and map out the potential upside and downside risks I imagine they will quickly come to the same realisation that I have written about.

Better use of assets, a more creatively commercial approach, not just to the way we deliver services but to what sort of services we in fact deliver, and a renewed focus on better partnership working will help to unlock hidden potential. With regard to further spending reductions, navigating 2013 will be complex and challenging, not least because we know what awaits us just over the horizon. In spite of this, the sector must resist any urge to naval gaze at a time when decisions made now will likely have repercussions that run right up until the end of this decade.

• Read the rest of our annual round-up: Neil McInroy on the need for a new economic narrative, Julian Dobson on the emerging collaborative economy, John P. Houghton on the need for a third way in regeneration, Richard Caulfield on the challenge ahead for the community and voluntary sector and Keren Suchecki on welfare and poverty